One of the exciting things about Forward Partners is that we’re blazing a trail in the investment world. Our model of backing entrepreneurs and then also investing heavily in a team and co-working space to support them is new. I like that about us. Our bet is that the investment in support will pay dividends when our companies exit, and if we are right our entrepreneurs will win big and we will win big.
Being new comes with a challenge though, and the challenge is that there is no easy way to describe us. We are a bit like an accelerator programme, a bit like an incubator and a bit like a straight early stage fund, yet we are also different to all of these things in crucial ways. When entrepreneurs hear the word ‘accelerator’ they think classes of twenty startups on three month programmes. We invest in 1-2 companies per quarter that join us for a year long programme, and we invest in late-seed stage companies too. The word incubator reminds people of 1990s incubators that invested cash with one hand and then took it back with the other by forcing their companies to spend money on their real estate and other services. We definitely don’t do that. Finally, we are different to early stage funds (and many of them are great early stage funds) because we spend much more money supporting our portfolio.
‘Startup studio’ is a fourth label that has been used to describe us, but it has been something of a catch-all term used to describe any company that is in the business of creating, or helping to create, companies, and hence of limited use.
That changed last week when Makeshift and NESTA convened a workshop to discuss whether ‘startup studios are a thing’. I couldn’t make the workshop but arrived just as it was ending so I could join the panel discussion afterwards. My first conversation was with Nick Marsh, co-founder of Makeshift, who excitedly explained that they had brought some much needed clarity to the subject by coming up with three different categories of ‘startup studio’:
- Entrepreneur led studios that exist to help their entrepreneurs find the next idea. They pursue multiple ideas in parallel and then often settle on one. They are usually self-funded by the entrepreneurs. Examples include Obvious Corp in the US (which spawned Twitter and Medium) and Makeshift and Just Add Red here in the UK.
- Agency led studios that grow out of creative agencies looking to exploit good ideas they’ve had and/or take advantage of spare capacity. Examples include Mint Digital and Neverbland.
- Investor led studios that offer a very high level of service to the entrepreneurs they invest in providing them with a mix of capital, office space, developers, designers, recruiters and fundraising support. Examples include Forward Partners, Science Inc, aspects of Betaworks, and maybe Rocket Internet.
Nick sets these definitions out and provides more detail in a very helpful blog post.
‘Investor led studio’ or better ‘Ecommerce investment studio’ could be a great way to describe Forward Partners. The tagline on our website is ‘The catalyst for ecommerce startups’ and that’s great for marketing copy because it conveys the sense that we help make things happen. However, it’s less useful in conversation because it doesn’t help people understand what we do. I like ‘Ecommerce investment studio’ because it makes it clear that we focus on ecommerce, that we have an investment mindset, and that we help our companies with the services that studios provide. The residual issue is some vagueness around the services we provide, but I think people in the startup ecosystem have a vague idea and at least we’ve teed up the question.